Tag: Finance

After playing a strong role in negotiations over the ‘six-pack’ of economic governance legislation that has formed the core of the EU’s policy response to the Eurozone sovereign debt crisis, the European Parliament’s Economic and Monetary Affairs (ECON) Committee now turns part of its attention back to the no-less imperative task of financial regulatory reform.

Yesterday Ireland joined Greece and Portugal in the credit rating ‘junkyard’ as Moody’s downgraded its debt to Ba1 level. The agency also put the country on a negative outlook, meaning that further downgrades are likely.

Ireland’s response is one of understandable frustration, as it has until now been widely commended for ‘getting with the programme’ and implementing harsh austerity measures. More interesting is the furious reaction of EU leaders, perhaps reflecting the fact that recent downgrades are less a verdict on the Irish or Portuguese economies than a condemnation of Europe’s collective failure to get to grips with a crisis that still threatens to engulf its single currency.

After months of tough negotiations between EU finance ministers, the European Commission and the Lisbon Treaty-empowered European Parliament, a long-awaited overhaul of European financial supervision now looks set to go ahead.

The IIEA’s International Financial Reform Working Group came together in 2009 and evolved in various formats from then up to March 2010. Its regular roundtable meetings were complemented by a series of keynote addresses at the IIEA on related topics.

These publications have emerged from the process. It is hoped that they will provide a basis for further discussion and research among the members of the Working Group itself, the membership of the IIEA, and a wider public.

At the 2009 G20 summit in Pittsburgh, leaders asked the IMF to prepare a report for their next summit (taking place in Toronto in June) on how the financial sector could make a fair and substantial contribution toward paying for the costs of future bank rescue packages. Read the rest of this entry »

In responding to the financial crisis, the EU has proposed both new regulations and new supervisory arrangements. It is also reviewing and amending an existing suite of financial services legislation.

The focus of this paper is the European Commission’s proposals in the area of supervisory reform. It begins with a discussion of the supervision function and the status quo before the financial crisis, before proceeding with a short summary of a report that effectively laid the basis for the EU’s supervisory response to the crisis. It then tracks the policymaking process as it unfolded in 2009 and evaluates the package of draft legislation as it stands now, in late 2009, adopted by the Commission and being negotiated under the co-decision procedure between the European Parliament, Council and Commission. Finally, it considers some issues relating to the establishment and operation of the bodies proposed in the draft legislation and offers some preliminary observations.

Europe is divided over proposals to regulate alternative investment funds.

One of the most controversial elements of the European Commission’s response to the financial crisis has just arrived in the European Parliament, ripe for criticism, debate and amendment. Upcoming sessions of the Parliament and the European Council will grapple with a draft directive, put forward by EU Internal Market Commissioner Charlie McCreevy in April 2009, aimed at regulating the activities of Alternative Investment Fund Managers (AIFM). The AIF Management sector in the EU is substantial, diverse and disproportionately based in a small number of member states (preeminently the UK but also Ireland), so proposals to regulate it were always bound to be politically contested. Indeed, in what looks set to be the latest installment in a long-running feud between the City of London and continental capitals over financial supervision and regulation, protests against the directive have so far been numerous, vocal and sustained. Read the rest of this entry »